Nvidia made its name designing high-end graphics chips for PCs. But facing increased competition in that market from Advanced Micro Devices Inc and Intel, company co-founder and chief executive Jen-Hsun Huang has pushed into mobile, combining central processors based on ARM Holdings Plc architecture with Nvidia's own graphics technology.

Intel said earlier this week it would pay Nvidia $1.5 billion to license its patents, settling a legal dispute and validating Nvidia's focus on graphics technology.

And at last week's Consumer Electronics Show, or CES, Nvidia said it was developing an ARM-based PC central processor under the code name Project Denver, directly challenging Intel in its own traditional market.

Adding to upheaval in the semiconductor industry, Advanced Micro Devices Inc's chief executive, Dirk Meyer, left the company this week due in part to the company's lack of a mobile strategy.

People are digesting the Intel settlement, digesting CES ... Their primary competitor (AMD) just got a lot weaker, Gauna said.